The treatment of Alzheimer's disease (AD) offers a compelling commercial
opportunity for the pharmaceutical industry because of the large and
growing patient population and the high level of unmet need. As the baby
boomer generation begins to turn 65, the AD population is expected to
expand dramatically. Despite this growing patient pool (and thus the
need to manage the disease in such a large number of patients),
treatment options for AD are at present limited to symptomatic therapies
with modest efficacy of limited duration at best.

Disease-modifying therapies that could slow, halt, or reverse the
progression of the disease are of critical need in this market and are
eagerly anticipated by physicians. Potentially disease-modifying
therapies in development for the treatment of mild to moderate AD
include the anti-beta-amyloid monoclonal antibodies solanezumab (Eli
Lilly) and bapineuzumab (Janssen Alzheimer Immunotherapy/Pfizer), as
well as Baxter's intravenous immunoglobulin product Gammagard.

However, the efficacy and safety of these products remain to be
demonstrated in their ongoing Phase III trials, and the recent history
of disease-modifying therapies in late-stage development for AD has set
a grim precedent for such therapies. Nevertheless, we expect the U.S. AD
landscape will shift dramatically over the next three to five years as
novel disease-modifying therapies launch beginning in 2014 into a drug
market dominated by generically available symptomatic therapies.